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TMNG Global Reports Fourth Quarter and Full Year 2012 Financial Results



TMNG Global Reports Fourth Quarter and Full Year 2012 Financial Results

       – Continued to Drive GAAP Profitability in the Fourth Quarter –

        – Results Demonstrate Improved Operating Performance in 2012 –

OVERLAND PARK, Kan., Feb. 26, 2013 (GLOBE NEWSWIRE) -- TMNG Global
(Nasdaq:TMNG), a premier provider of professional services and technical
solutions to the global leaders in the communications, digital media, and
technology industries, reported financial results for its 2012 fourth quarter
and full year ended December 29, 2012.

"In 2012, TMNG Global accomplished each of the goals we outlined at the
beginning of the year. We achieved profitability, on both a GAAP and non-GAAP
basis, in the second half of the year; we reduced our expense structure and
drove efficiency and enhanced accountability in our business; and we
established a culture of increased communication and trust. And, as we
delivered against our strategic plans to evolve the firm, we started to see
early signs of renewed growth in the fourth quarter," said Donald Klumb, CEO
of TMNG Global. "In 2013, we are sharpening our focus on building the
foundations for growth by improving intra-company collaboration across
business units, deepening our relationships with strategic customers,
tightening our alliances with key business partners, and enhancing our
software solutioning capabilities. At the same time, we are leveraging our
strengths to capitalize on opportunities in targeted growth markets. We enter
the year with a much improved cost structure and a strong balance sheet, which
includes net working capital of $18.2 million."

Financial Results for the Thirteen Weeks Ended December 29, 2012

Revenues in the fourth quarter of 2012 were $12.9 million, compared to $13.5
million in the fourth quarter of 2011 and $12.7 million in the third quarter
of 2012. During the quarter, TMNG's gross margin was 38.7%, compared with
34.8% in the fourth quarter of 2011 and 38.6% in the third quarter of
2012. The year-over-year gross margin expansion demonstrates the Company's
success in improving its operational efficiency and reflects a favorable
services and solutions mix.

Selling, general and administrative expenses were $4.7 million in the fourth
quarter of 2012, compared to $6.3 million in the fourth quarter of 2011 and
$4.7 million in the third quarter of 2012. The year-over-year decline reflects
significant reductions in the Company's selling, general and administrative
expense structure that were implemented during 2012.

TMNG Global reported net income of $0.3 million on a GAAP basis, or $0.04 per
diluted share for the fourth quarter of 2012, a significant improvement from
the net loss of ($1.4) million or ($0.20) per diluted share in the fourth
quarter of 2011, and up from net income of $0.1 million or $0.02 per diluted
share for the third quarter of 2012.  After adjusting for the after tax impact
of depreciation and amortization expense and share-based compensation expense,
non-GAAP adjusted net income was $0.5 million, or $0.07 per diluted share
during the fourth quarter of 2012. The comparable non-GAAP adjusted net loss
was ($1.2) million, or ($0.16) per diluted share, for the fourth quarter of
fiscal 2011 and $0.4 million, or $0.05 per diluted share, for the third
quarter of 2012.

Financial Results for the Fifty-Two Weeks Ended December 29, 2012

For the fifty-two weeks ended December 29, 2012, revenues were $53.0 million,
compared with $63.1 million in fiscal year 2011. TMNG Global's gross margin
was 37.8% for the fifty-two weeks ended December 29, 2012, compared with 37.0%
in fiscal year 2011.

Selling, general and administrative expenses were $21.2 million for the
fifty-two weeks ended December 29, 2012, compared to $27.1 million in fiscal
year 2011.   

Net loss for the fifty-two weeks ended December 29, 2012 was ($1.2) million or
($0.17) per diluted share, compared with a net loss of ($4.4) million or
($0.62) per diluted share in fiscal year 2011. Non-GAAP adjusted net loss,
adjusted for the after tax impact of net realized losses on auction rate
securities, depreciation and amortization expense, and share-based
compensation, was approximately ($0.3) million, or ($0.04) per diluted share,
for the fifty-two weeks ended December 29, 2012. The comparable non-GAAP
adjusted net loss for the fifty-two weeks ended December 31, 2011 was ($2.5)
million or ($0.36) per diluted share.

In addition to reporting net income (loss) and net income (loss) per share on
a GAAP basis, this press release contains certain non-GAAP adjustments which
are described in the schedule entitled "Reconciliation of GAAP Net Income
(Loss) to Non-GAAP Adjusted Net Income (Loss)" that accompanies this press
release. In making these non-GAAP adjustments, the Company took into account
certain non-cash expenses and benefits, including tax effects as applicable,
and the impact of certain items that are generally not expected to be on-going
in nature or that are unrelated to the Company's core operations. Management
believes non-GAAP financial information provides a useful basis for evaluating
underlying business performance, but should not be considered in isolation and
is not a substitute for GAAP financial information. The Company believes that
providing such adjusted results allows investors and other users of the
Company's financial statements to better understand TMNG Global's comparative
operating performance for the periods presented.

TMNG Global's management uses the non-GAAP financial measure in its own
evaluation of the Company's performance, particularly when comparing
performance to the prior year's period and on a sequential basis. TMNG
Global's non-GAAP measure may differ from similar measures used by other
companies, even if similar terms are used to identify such measures. Although
TMNG Global's management believes the non-GAAP financial measure is useful in
evaluating the performance of its business, TMNG Global acknowledges that
items excluded from such measure have a material impact on the Company's net
income (loss) and net income (loss) per share calculated in accordance with
GAAP. Therefore, management uses non-GAAP measures in conjunction with GAAP
results. Investors and other users of our financial information should also
consider the above factors when evaluating TMNG Global's results.

Conference Call

The Company will host a conference call at 5:00 p.m. ET today to discuss 2012
fourth quarter and full year results.  The call may also include discussion of
company developments, forward-looking information and other material
information about business and financial matters. Investors can access the
conference call via a live webcast on the Company's website, www.tmng.com, or
by dialing 877-317-6789 in the United States or 412-317-6789 from
international locations and referencing the TMNG Global call. A replay of the
conference call will be archived on the Company's website for 90
days. Additionally, a replay of the call will be available by dialing
877-344-7529, pass code 10024668, through March 5, 2013.

About TMNG Global

TMNG Global (Nasdaq:TMNG) is a premier provider of professional services and
technical solutions to the global leaders in the communications, digital
media, and technology industries. TMNG Global and its divisions, CSMG and
Cartesian, and a team of approximately 500 experts, provide strategy,
operations and technology consulting services and technical solutions to more
than 1,200 communications clients worldwide.  The company is headquartered in
Overland Park, Kansas, with offices in Boston, London, New Jersey, and
Washington, D.C. For more information about the Company and its services,
visit www.tmng.com.

The TMNG Global logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6089

Cautionary Statement Regarding Forward Looking Information

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. In particular, any
statements that do not relate to historical or current facts constitute
forward-looking statements, including any statements contained herein
regarding expectations with respect to the Company's future business,
financial condition and results of operations.  Forward-looking statements are
subject to known and unknown risks, uncertainties, and contingencies, many of
which are beyond the Company's control, which may cause actual results,
performance, or achievements to differ materially from those projected or
implied in such forward-looking statements.  Factors that might affect actual
results, performance, or achievements include, among other things, conditions
in the telecommunications industry, overall economic and business conditions
(including the current economic slowdown), the demand for the Company's
services (including the slowing of client decisions on proposals and project
opportunities along with scope reduction of existing projects), the level of
cash and non-cash expenditures incurred by the Company, technological advances
and competitive factors in the markets in which the Company competes, and the
factors described in this press release and in The Management Network Group's
filings with the Securities and Exchange Commission, including the risks
described in its periodic reports filed with the SEC, including, but not
limited to, "Cautionary Statement Regarding Forward Looking Information" under
Part I of its Annual Report on Form 10-K for the fiscal year ended December
31, 2011 and subsequent periodic reports containing updated disclosures of
such risks. These filings are available at the SEC's web site at www.sec.gov.
Any forward-looking statements made in this release speak only as of the date
of this release. TMNG Global does not intend to update these forward-looking
statements and undertakes no duty to any person to provide any such update
under any circumstances.

                 (Please see attached financial tables)      

THE MANAGEMENT NETWORK GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
                                                                   
                                                                   
                           Thirteen Weeks Ended      Fifty-Two Weeks Ended
                           December 29, December 31, December 29, December 31,
                           2012         2011         2012         2011
                                                                   
Revenues                    $ 12,932     $ 13,546     $ 53,009     $ 63,088
                                                                   
Cost of services           7,933        8,829        32,951       39,756
                                                                   
Gross Profit               4,999        4,717        20,058       23,332
                                                                   
Operating Expenses:                                                
Selling, general and       4,726        6,291        21,155       27,067
administrative
Intangible asset            --           --           --          496
amortization
Total operating expenses   4,726        6,291        21,155       27,563
Income (loss) from         273          (1,574)      (1,097)      (4,231)
operations
Other income (expense)     8            5            16           (264)
Income (loss) before       281          (1,569)      (1,081)      (4,495)
income taxes
Income tax (provision)     (16)         169          (106)        79
benefit
Net income (loss)           $ 265        $ (1,400)    $ (1,187)    $ (4,416)
                                                                   
Net income (loss) per                                              
common share:
Basic and diluted           $ 0.04       $ (0.20)     $ (0.17)     $ (0.62)
                                                                   
Weighted average shares
used in calculation of net                                         
income (loss) per common
share
Basic                      7,113        7,091        7,103        7,082
Diluted                    7,116        7,091        7,103        7,082

 
THE MANAGEMENT NETWORK GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
                                                            
                                                            
                                              December 29, December 31,
                                              2012         2011
ASSETS                                                      
CURRENT ASSETS:                                             
Cash and cash equivalents                      $ 12,177     $ 13,250
Accounts receivable, net                      12,762       11,428
Prepaid and other current assets              658          755
Total current assets                          25,597       25,433
                                                            
NONCURRENT ASSETS:                                          
Property and equipment, net                   1,355        1,653
Goodwill                                      8,160        7,995
Other noncurrent assets                       204          206
Total Assets                                   $ 35,316     $ 35,287
                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                        
CURRENT LIABILITIES:                                        
Trade accounts payable                         $ 975        $ 908
Accrued payroll, bonuses and related expenses 4,003        4,147
Deferred revenue                              605          287
Other accrued liabilities                     1,809        1,297
Total current liabilities                     7,392        6,639
                                                            
NONCURRENT LIABILITIES:                                     
Deferred income tax liabilities               472          366
Other noncurrent liabilities                  441          461
Total noncurrent liabilities                  913          827
                                                            
Total stockholders' equity                    27,011       27,821
Total Liabilities and Stockholders' Equity     $ 35,316     $ 35,287

 
THE MANAGEMENT NETWORK GROUP, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED NET INCOME
(LOSS)
(unaudited)
(in thousands, except per share data)
                                                                  
                                                                  
                          Thirteen Weeks Ended      Fifty-Two Weeks Ended
                          December 29, December 31, December 29, December 31, 
                          2012         2011         2012         2011
                                                                  
Reconciliation of GAAP
net income (loss) to                                              
non-GAAP adjusted net
income (loss):
GAAP net income (loss)     $ 265        $ (1,400)    $ (1,187)    $ (4,416)
                                                                  
Realized loss on auction   --           --           --           312
rate securities
Depreciation and           178          215          767          1,358
amortization
Non-cash share based       11           4            21           108
compensation expense
Tax effect of applicable   16           30           106          120
non-GAAP adjustments ^ 1
Adjustments to GAAP net    205          249          894          1,898
income (loss)
                                                                  
Non-GAAP adjusted net      $ 470        $ (1,151)    $ (293)      $ (2,518)
income (loss)
                                                                  
                                                                  
Reconciliation of GAAP
net income (loss) per
diluted common share to                                           
non-GAAP adjusted net
income (loss) per diluted
common share:
GAAP net income (loss)     $ 0.04       $ (0.20)     $ (0.17)     $ (0.62)
per diluted common share
                                                                  
Realized loss on auction   --           --           --           0.04
rate securities
Depreciation and           0.03         0.03         0.11         0.19
amortization
Non-cash share based       0.00         0.00         0.00         0.01
compensation expense
Tax effect of applicable   0.00         0.01         0.02         0.02
non-GAAP adjustments ^ 1
Adjustments to GAAP net
income (loss) per diluted  0.03         0.04         0.13         0.26
common share
                                                                  
Non-GAAP adjusted net
income (loss) per diluted  $ 0.07       $ (0.16)     $ (0.04)     $ (0.36)
common share
                                                                  
Weighted average shares
used in calculation of    7,116        7,091        7,103        7,082
net income (loss) per
diluted common share
                                                                  
                                                                  
Footnote 1: The Company calculated the tax effect of non-GAAP adjustments by
applying an applicable estimated jurisdictional tax rate to each specific
non-GAAP item after consideration of the Company's valuation allowance.

CONTACT: Brainerd Communicators
         Ray Yeung (Media)
         yeung@braincomm.com
         Corey Kinger (Investors)
         kinger@braincomm.com
         212.986.6667

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